Rising sick bill is costing UK business £29bn a year – PwC research

Published at 00:01 AM on 15 July 2013

Sick days are costing UK business nearly £29bn a year as UK workers take more than four times as many days off work due to sickness as their global counterparts, according to new research by PwC.

UK workers have an average of 9.1 days off from their jobs each year due to sickness. This is nearly double the amount workers in the US take at 4.9 days of sickness a year, and four times more than their counterparts in Asia Pacific (2.2 days) and higher than Western Europe (7.3 days).

PwC’s research shows that sickness accounts for around 90% of UK companies’ absence bill, which also covers compassionate leave and industrial action. The analysis reveals that while UK employees are taking less unscheduled absence days compared to two years ago (9.8 days in 2013, compared to 10.1days in 2011), the number of these days that are due to illness has risen over that time (9.1 days in 2013, up from 8.7 days in 2011) and so the associated cost of staff sickness has also risen. Sick days now account for £28.8bn of the UK’s overall £31.1bn absence bill.

Jon Andrews, human resources consulting leader at PwC, said:

“Absence is still a significant drain on British businesses. At a time when companies are striving for growth it is vital they address this cost by looking for ways to improve employees’ health, morale and motivation. Allowing greater workplace flexibility could go a long way to helping break the sickness cycle.

“Forward-looking companies will invest in health and wellbeing services to tackle the issue before absence starts to hit their bottom lines. This is particularly relevant for start-ups and SMEs, where the cost of absence can be particularly crippling.

“With the demographics of the workforce rapidly changing as many people are now having to work far longer before they retire, companies are likely to see a greater level of sickness if they don’t start addressing this issue now.”

PwC analysis shows that all countries have managed to reduce their overall absence levels, but UK businesses have made the least progress amongst their global counterparts.

Jon Andrews, HR consulting partner at PwC, commented:

“UK companies are still far behind their global counterparts in minimising the impact of sick days on their businesses. It is worrying that UK workers continue to take considerably more sick days than any other global workers. The combination of more flexible labour laws and a cap on the number of paid sick days in the US and Asia goes some way to explain their lower levels of absence. For workers in the US and Asia, there is a sense that there is more at stake if they take unscheduled time off work.”

PwC’s analysis reveals that technology companies have the lowest level of sick days of any sector at 3.4 days. This is three times lower than public sector workers (11.1 days). Retail and leisure, and engineering and manufacturing workers are not far behind, taking an average of 9 days and 8.7 days respectively. The research shows that the best performing sectors have been able to reduce their absence levels since 2011, while the worst performing have remained relatively static.

Jon Andrews, human resources consulting leader at PwC, said:

“The stark variation in absence levels among different sectors and across western Europe suggests employee engagement, workplace environment and culture can have a huge influence on the number of sick days employees take. Technology companies’ often lead the way in terms of innovation and this is likely to feed down into all aspects of their business, including how they motivate and engage staff and the level of workplace flexibility.”

1. In addition to sickness, absence includes industrial action, compassionate leave and any other unauthorised leave. It doesn't include any entitled or statutory leave e.g. holidays, national holidays, maternity and paternity leave, jury service and military service.

2. PwC’s absence research is based on data gathered from 2,500 companies by its Saratoga team, the recognised leader in the measurement and benchmarking of human capital activity. A range of quantitative and qualitative tools are used to identify risk and evidence best practice across an organisation.

2013 PricewaterhouseCoopers. All rights reserved.

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At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.